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Michigan Lemon Law

Michigan’s “Lemon Law,” was enacted to protect consumers who have purchased new cars with serious defects which the manufacturer cannot or will not fix under warranty. The law defines a lemon as a new motor vehicle that has a defect that substantially impairs the use or value of the vehicle, and which has not been repaired after a reasonable number of attempts. If the substantial defect still exists or recurs after a reasonable number of repair attempts, the consumer has the right to a refund or a replacement vehicle.

Any new car, van or truck bought by a resident of Michigan for personal or family use is covered by the Lemon Law so that if a defect occurs within the first year of ownership OR within the express written manufacturer’s warranty (whichever is earlier), it may qualify as a lemon if the problem persists.

The Lemon Law gives the manufacturer, its agent or authorized dealer a “reasonable number of attempts” to repair the substantial defect. A reasonable number of attempts has been allowed when either of the following happens:

repair is attempted four or more times for the same substantial defect, and the problem persists (with the first repair within the first year of ownership or during the express manufacturer’s warranty period, whichever is earlier);

OR

repair attempts for any substantial defect or combination of defects total 30 or more days during the first year of ownership (not necessarily all at one time.)

The defect must continue or recur after a reasonable number of repair attempts to qualify as a lemon. However, prior to the last repair attempt you must give the manufacturer a “last chance” to repair your vehicle. That means after the third repair fails, or after the vehicle has been in for repairs for 25 days, you must notify the manufacturer that you are giving them a final attempt to repair your vehicle, or you will proceed under the lemon law

Final Repair Attempt You should send notification of the final opportunity to repair (the “last chance letter”) by certified mail, return receipt requested, to the manufacturer’s regional office. You may get this address from you Owner’s Manual. Keeping copies of your letters is the best way to document that the manufacturer was provided a final opportunity notice.

The manufacturer may choose not to use this final opportunity to attempt repair. The manufacturer must notify you within a reasonable time of where you are to take your vehicle for the last repair attempt. If they do not do notify you, or if they do and the substantial defect has not been repaired, or has been repaired and recurs, you have the right to demand a refund or replacement under the Lemon Law. If the manufacturer does not comply voluntarily, you may then seek your remedies under the Lemon Law, including replacement of the vehicle, or a refund of the purchase price as described below.

REPLACEMENT If your vehicle qualifies as a lemon, the manufacturer must either replace your defective vehicle with a suitable replacement of equal value, or refund your money to you and take the vehicle back. You may reject a replacement vehicle and demand a refund.

Reasonable allowance for use: Under the Lemon Law, a reasonable allowance for use will be taken by the manufacturer, but this deduction is only $.10 (ten cents) per mile for the mileage you drove the vehicle before the first complaint was made to the dealer or manufacturer regarding the defect(s) in the vehicle. Included in your refund will be: sales tax; registration fees; finance charges on a loan; dealer-added options; unreimbursed towing or rental charges resulting from the defect; unused portion of an extended warranty, unused portion of credit insurance; defect related incidental costs; and other incidental costs.

If your vehicle was purchased or leased after January 1, 1999, the offset for usage is calculated using a different formula. It is still triggered by the number of miles driven prior to the first complaint. That number is used as the numerator – the top half of a fraction – with 100,000 as the denominator. That fraction is multiplied with the purchase price and the resulting amount is the offset for usage. However, the law now allows the manufacturer to claim as part of the offset any miles driven over 25,000 – so those must be added to the numerator as well. If you drove your car 10,000 miles at the first complaint and it cost $30,000, you would lose as an offset $3,000 (10,000 over 100,000 = 1/10th of the purchase price; 1/10th of $30,000 = $3,000.)

Arbitration is available from most manufacturers if you believe that your vehicle is a lemon. In arbitration, the consumer and the manufacturer present evidence about the condition of the vehicle to a panel of arbitrators. These arbitrators can usually order partial refunds as well as full ones. The manufacturers are also bound by the decisions of their arbitration programs. If you are dissatisfied with the results of manufacturer sponsored arbitration, you may then proceed to file suit. For specific information on your manufacturer’s arbitration program, look in the warranty booklet that came with your car.

If you are considering court action, you should consult an attorney. Further, depending on whether the manufacturer’s arbitration process meets certain federal guidelines, you may NOT have to use it prior to filing suit. If you do not know whether your manufacturer’s arbitration meets those guidelines, consult an attorney specializing in lemon law. You may contact me with the name of your manufacturer if you are in Michigan, and I will answer any questions you might have regarding this, or anything else above.